Over the years I have written at great length about wireless networking, covering everything from the launch of the first retail 802.11b access point to the recent announcement by city officials in San Francisco that Earthlink and Google would provide city-wide free WiFi access to the masses.

WiFi hotspots are big business, with the likes of T-Mobile, The Cloud, BT, Swisscom and others making real money out of paid-for WiFi access in coffee shops, hotels, pubs and bars, hospitals, airports, trains and stations, and soon – in-flight on commercial airlines. These are all commercially run hotspots, installed and maintained by large national and multinational companies with the money to saturate an area or a chain of stores with the kit and the connectivity needed to offer a useable WiFi service.

However, what if we, the humble users, could build our own national, or even international network of WiFi hotspots, offering heavily discounted access to people, and free access to other infrastructure providers – all while making a few quid to cover the cost of the kit and out broadband line rental?

It is no longer a what if – it’s actually happening, right now, right here in the UK, as well as in the US and across Europe.

The company is called Fon, and it first came to light in December last year. Like many I covered the story, but at the time, there really wasn’t much of a story to cover. Six months later and things are different. With 50,000+ registered users and realistic aims of having 50,000 working hotspots worldwide by September this year, Fon’s unusual approach to WiFi network infrastructure is beginning to take hold. The business proposition is very straightforward:

Seed low-cost wireless routers into the market for a nominal fee plus postage (At the time of writing, boxes are being sold for $5 in the US and €5 in the UK and across Europe. The total cost including VAT and postage for someone in the UK to get hold of one is €27, or about £18 at current exchange rates).

Users get a very good, very cheap 802.11g wireless 4-port router to use for their own purposes be it home networking or even in a business, which they connect to their existing cable modem or DSL-based broadband connection.

The router (currently the company is using the very popular Linksys WRT54GL 4-port 802.11g wireless router, which uses and open-source firmware that can be customised for any purpose) contains a custom Fon firmware, which handles registration with the Fon network (so they can see if you playing fair and are actually using the router and making it available as per the offer rather than flogging it at a profit on eBay) and presents outside users with a Fon splash screen, transaction handling, personalised welcome messages and other functions normally associated with a charging hotspot.

In addition to accessing their own connection through the router, anyone in range can connect to the wireless access point. If they are another Fon hotspot operator, they can use your Fon hotspot for free, and visa versa, but if they are not, then they can pay for a day’s worth of Fon access for a nominal fee (currently $3 or €3 for one day, falling to $2 or €2 per day if you pay for a whole week).

Fon handles the back end and the transaction processing, and revenue is split 50/50 between Fon and the owner of the hotspot that initiates the sale.

All very democratic, and a reasonable business model. The company is backed financially by companies including Skype, Google and investment house Sequoia Capital and Index Ventures. Certainly in the case of Sequoia and Index, these are big grown-up companies with a track record of successful investment, which in itself adds credibility to the Fon proposition. For Skype, Fon provides a network for Skype over WiFi, and it’s the sort of cool, geeky venture that Google would invest in either way.

There is a bigger picture view to this company and its service. Several companies have tried to offer a “Hotspot in a box” type product, but none have been able to offer one for this kind of price, as no company has been prepared to date to swallow the cost of developing hardware and subsidising it up-front. The arrival of a cheap, mass-market product from Linksys with open-source and easy-to-develop firmware is the key – Fon can buy generic hardware in bulk at trade prices, thus cutting the volume of subsidy needed. They flash boxes as needed with their firmware, and ship them out to people like me, or the guy who runs the cafe at the bottom of the street where I live. In short – it expands WiFi hotspot networks into medium and low footfall areas and improves local community access to broadband.

The cafe owner can offer WiFi at very low start-up (particularly if he already has broadband on the premises) and operating cost to his customers, and makes recurring revenue on each connection pass sold via his hotspot. While I can offer a piece of my often unused, high-capacity broadband, as a local hotspot in an area that BT or T-Mobile would never install a hotspot.

I’ve ordered a Fon router, and will report back in a few weeks when it arrives. Suffice to say, Ruislip is not well served by the current WiFi hotspot operators, but there will soon be at least one new hot spot in close proximity to Ruislip Gardens tube station.

:::::Bloggers

Ewan Spence
Anyone who followed the 2005 Open Tech conference coverage will have heard the now legendary iPod Shuffle Shuffle story. Ewan was the man behind the most talked about physical hacking demo of the year. And yes, I now see the funny side of it

Armand David
A fellow geek and a technology PR professional. Very good end-user techy blog

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